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Thursday, August 28, 2014

"Bloggers achieved a significant victory when the United States Court of Appeals for the Ninth Circuit held on Jan. 17, 2014 that First Amendment protections in defamation lawsuits extend to bloggers. In April 2014, a Florida appellate court held that bloggers were entitled to pre-suit notices for defamation suits under Florida law. Although the victories are welcome news to online content producers everywhere, the jailing of an Alabama blogger has raised questions and concerns among free speech advocates. Online speakers may still have obstacles to overcome before courts fully recognize that First Amendment protections apply to them.

Ninth Circuit Recognizes First Amendment Protections for Bloggers On Jan. 17, 2014, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled that bloggers receive the same First Amendment protections as institutional media in defamation lawsuits. Obsidian Finance Group, LLC v. Cox, 740 F.3d 1284 (9th Cir. 2014).

The case involved a dispute between Kevin Padrick, a principal with Obsidian Finance, a firm that advises financially troubled businesses, and Crystal Cox, a self-described investigative blogger. In 2008, Obsidian began working with Summit Accommodators, which was considering filing for bankruptcy. A bankruptcy court appointed Padrick as Chapter 11 trustee once Summit filed reorganization paperwork. Shortly thereafter, Cox began posting accusations of criminal activity carried out by Padrick and Obsidian in their work with the Summit bankruptcy on several different websites, including “obsidianfinancesucks.com.” After sending a cease-and-desist letter that Cox did not comply with, Padrick and Obsidian filed a defamation suit in U.S. District Court for the District of Oregon.

The district court held that only one blog post could be interpreted as containing a statement of fact, and could proceed to trial. Obsidian Finance Group, LLC v. Cox, 812 F. Supp. 2d 1220 (D. Or. 2011). The remaining blog posts were considered constitutionally protected opinions because they did not contain provable statements of fact. Cox also claimed protection under Oregon’s journalist’s shield law, but District Judge Marco A. Hernandez held that she did not meet the definitions of who can receive protection as laid out by the state statute. (For more information on Cox’s shield law claims, see “Defamation Lawsuits Pose Threat to Journalists as Online Communication Complicates First Amendment Analysis” in the Spring 2012 issue of the Silha Bulletin).

Cox also made First Amendment arguments that the liability standards should be governed by the Supreme Court’s decision in Gertz v. Robert Welch, Inc, 418 U.S. 323 (1974). In Gertz, the Supreme Court held that a private plaintiff needs to show only negligence to recover actual damages from a media defendant.

But a plaintiff can only recover presumed or punitive damages upon a showing that a media defendant acted with “actual malice,” meaning that the statements were made with knowledge of falsity or reckless disregard of the truth. Gertz v. Robert Welch, Inc. Cox argued that, under Gertz, Padrick and Obsidian carried the burden of proving her negligence in order to recover actual damages for defamation.

Cox also argued that Padrick and Obsidian must show that she acted with actual malice to receive presumed damages. Judge Hernandez dismissed these arguments, stating that Cox had not proven that she was a journalist. Therefore, the protections of Gertz did not apply to her.

Cox also contended that Padrick and Obsidian were public figures. Under the New York Times v. Sullivan and the Gertz rulings, public figures are required to prove actual malice before they may recover any type of damages. New York Times v. Sullivan, 376 U.S. 254 (1964). The district court judge once again dismissed this argument, stating that Padrick and Obsidian had not made themselves public figures by becoming involved with a public controversy. Rather, Cox had created the controversy.

At the conclusion of the trial, a jury returned verdicts in favor of Padrick and Obsidian. Cox moved for a new trial, which the district court denied. Cox then appealed to the Ninth Circuit Court of Appeals, arguing that the district court had ruled incorrectly on the liability standards and Padrick’s and Obsidian’s public figure status. Padrick and Obsidian filed a cross-appeal contending that the jury should have considered their defamation claims relating to the other blog posts.

In a unanimous decision, the Ninth Circuit panel reversed the district court’s judgment against Cox. The court held that Gertz’s liability rules were not limited only to situations that involved traditional media defendants. The opinion by Judge Andrew Hurwitz explained that although the Supreme Court has never ruled that the Gertz standard applied to others besides institutional media, the Court’s language in the opinion also did not limit the ruling to institutional media alone. Hurwitz wrote, “[the Supreme Court] has repeatedly refused in non-defamation contexts to accord greater First Amendment protection to the institutional media than to other speakers,” citing several cases in which the high court declined to create a distinction between members of the press and the general public.

As a result, the court agreed with other circuits that “the First Amendment defamation rules in Sullivan and its progeny apply equally to the institutional press and individual speakers.” The court also noted that trying to create a distinction between institutional media and other communicators was very difficult. Therefore, the court said that the key First Amendment factor under Gertz in defamation cases was not the identity of the speaker. Rather, “the public-figure status of a plaintiff and the public importance of the statement at issue” are the key First Amendment considerations. Through this rationale, Cox, as a blogger, was entitled to the same liability standards that traditional forms of media received under the First Amendment.

In addition to determining that Sullivan and Gertz protections apply to the general public, the appeals court also rejected the argument that Gertz was limited to defamation cases involving matters of public concern. Hurwitz wrote that even if Gertz was limited to such a situation, Cox’s blog posts concerned public matters qualifying for protection. However, the appellate court rejected Cox’s argument that Padrick and Obsidian became public officials because a bankruptcy court appointed them to oversee Summit’s affairs and provided compensation to them. The court also held that Cox’s remaining blog posts were clearly opinions. The panel concluded its decision by granting Cox’s request for a new trial.

Several First Amendment advocates and advocacy organizations praised the Ninth Circuit’s ruling. UCLA law professor Eugene Volokh, who represented Cox during the appeals process, told Associated Press reporter Jeff Barnard for a Jan. 17, 2014 article that the decision “makes clear that bloggers have the same First Amendment rights as professional journalists.”

Volokh also noted that the decision followed similar court rulings that granted First Amendment protections to other writers and book authors, although this ruling appeared to be the first to grant protection to bloggers.

In the same article, Gregg Leslie, the legal defense director for the Reporters Committee for Freedom of the Press (RCFP), said the ruling confirmed the fact that Gertz was “not a special right to the news media.” Rather, it applied to everyone. “So it’s a good thing for bloggers and citizen journalists and others,” Leslie said."

Wednesday, August 27, 2014

"I must say that I am honored to be recognized among the other finalists, and look forward to more wine blogging in the coming year.

Now on to the blogging . . . A recent case in the Ninth Circuit Court of Appeals held that bloggers enjoy the same protections as do journalists operating in more traditional media outlets. The Obsidian Finance Group v. Cox opinion marks the first federal circuit court of appeals to so hold.

The basic issue when the First Amendment is applied to journalists often arises when a plaintiff sues a journalist for defamation, libel, or slander. What are recognized state law tort actions, which seek to protect people against the publication of untrue statements that damage one’s character or perception in the community, run up against federal Constitutional protections for free speech and freedom of the press.

There is a long history of case law governing this tension, which starts with the 1964 case of New York Times v. Sullivan. The gist of Sullivan provides that public figures, when positioned as plaintiffs in a defamation action, must prove that a statement made by a traditional media outlet was made with actual malice – that the statement was made with reckless disregard for its truth.

The question that has more recently been asked was whether these doctrines should be applied the same in the context of statements made in blogs, tweets, Facebook posts, and other Internet-based forums.

With the Obsidian decision, the Ninth Circuit appears to have answered the question by holding that the speech should enjoy the same protections, despite the fact that the forum is not a traditional media outlet. Of course, there is still lots of room for the doctrines to be applied differently, but one thing is for sure: that a plaintiff will not be able to argue that Sullivan wholly does not apply to the speech simply because the forum is an Internet website rather than a traditional media outlet.

You might be wondering how this case relates to the wine business, which is the subject of this blog. Well, my friend, you are reading the words of a wine blogger, who resides within a state falling in the Ninth Circuit. With the recent Wine Blog Awards finalists announced, I thought it was a good time to turn the focus on us for once. So, maybe if I or the other wine bloggers happen to taste a bad wine and later write that it tastes like they fermented the wine with garbage, such a statement will be Constitutionally protected opinion speech."

"Obsidian Finance Group, LLC v. Cox, 740 F.3d 1284, is a very interesting recent decision coming out of the Ninth Circuit Court of Appeals. The case involved a “self-styled” “citizen journalist” blogger who was not affiliated with any media organization.

The blogger, Crystal Cox, was a former Real Estate Agent who took issue with some business transactions going involving sale of certain properties through a trustee. Her blogs were critical of the sales and the persons involved including Obsidian Finance Group and their principal, Kevin Padrick. Obsidian sued Ms. Cox for defamation for the statements she made in the blog posts.

Ms. Cox claimed that, because the issues discussed in the blog were a matter of public concern and she was merely reporting on these issues, the plaintiffs needed to show some fault (or “malice”) before liability could be established for defamation. The defendants argued that all they needed to show was that she was negligent in making the statements. A jury trial was held and Ms. Cox was hit with a $2.5 Million judgment. Cox appealed.

The Ninth Circuit Court of Appeal reversed the judgment and remanded the case back to the District trial court. The court held that Cox’s blog addressed a matter of public concern because it questioned whether the business transactions involved were protecting the interests of the investors. It further ruled that the lower court should have instructed the jury that Cox could not be held liable for defamation unless it found she acted negligently.

The court relied on prior decisions such as Gertz v. Robert Welch, Inc. and even cited to the much debated Citizens United v. Federal Election Commission to state that there is now a strong tendency with Federal law to blur the lines of “media v.s non-media” for purposes of interpreting First Amendment freedom of speech rights. In pertinent part, the ruling stated as follows:

“…the protections of the First Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others’ writings, or tried to get both sides of the story.”

The Significance of This Decision for Bloggers and Internet Free Speech
While one cannot draw too much from any one decision, this case does seem to provide some, significant freedom of speech protections to bloggers and other people who contribute content to the internet and may not, necessarily, be formal “reporters”.

Under the reasoning of the court, people who blog, tweet, or otherwise put out content on the internet by way of articles or social media shares are afforded the same First Amendment protections as more traditional “media” outlet authors, like newspaper reporters. It also followed a line of case rulings by the Ninth Circuit that distinguish between people simply providing their “opinion” on a subject via the internet vs. verifiable facts. All of this provides legal clarification for all of us “individuals” who share information via the world wide web that we have the right to do so (within reason) without fear of being held legally liable for defaming someone!"